'I owe someone $16,000 worth of free pizza': Papa John's CEO shares the fascinating story of how his $2.2 billion business got its name

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John Schnatter, the founder and CEO of Papa John's, owes someone a lot of free pizza. A whopping $16,000 worth, to be exact.

Let's start at the beginning.

Schnatter, now 54, had always dreamed of opening his own a pizza joint.

In high school, he worked at Rocky's, a pizza and sub shop in his hometown of Jeffersonville, Indiana, where he first fell in love with making pizza. He got through college by working at a place called Greek's Pizzeria and even considered dropping out of Ball State University to open a franchise, but his parents wouldn't allow it.

"That's when I got the idea," he tells Business Insider. "I'd finish college and open my own restaurant. I had the recipes; I knew the equipment; I had a store layout. All I needed was a name."

Schnatter says he lived six doors down from a marketing major in the LaFollette dorm at Ball State. "So I went up to him and said, 'Hey, I need a name and a logo for this concept' and he came back to me three days later with both. And I actually really liked the way the logo looked, and thought the name was pretty clever. So I said to him, 'Listen, if this ever goes big, I will give you a pizza a week for the rest of your life.'"

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'I owe someone $16,000 worth of free pizza': Papa John's CEO shares the fascinating story of how his $2.2 billion business got its name

New York Thin Crust

(AP Photo/Kathy Willens)

Neapolitan

(Photo via Shutterstock)

California Style

(Photo by Lawrence K. Ho/Los Angeles Times via Getty Images)

Chicago Deep Dish

(Photo by Daniel Acker/Bloomberg via Getty Images)

Detroit Style

(Photo by Cyrus McCrimmon/The Denver Post via Getty Images)

New England Greek

(Photo via Getty Images)

Colorado Style

(Photo By Brian Brainerd/The Denver Post via Getty Images)

Tomato Pie

(Photo by Roberto Machado Noa/LightRocket via Getty Images)

Chicago Thin Crust

(AP Photo/Paul Beaty)

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A few years later, in 1984, Schnatter finally took a leap of faith.

He was running the bar he co-owned with his father in Jeffersonville at the time when he decided to turn the tavern's broom closet into a pizza business. To make it happen, he sold his beloved Camaro Z28 for $2,800 to buy $1,600 worth of used restaurant equipment.

The broom closet pizza shop eventually turned into what's now the third largest pizza chain in the world, with 4,700 restaurants around the globe and a market capitalization of $2.2 billion.

"Now that we've been in business for 32 years, if you do the math, I owe him about $16,000 worth of pizza," Schnatter says. "But he's never come forward and I don't know his name or how to find him. All I know is that he was from Chicago -- and that I owe him good."

Thanks to this mysterious man, Schnatter is widely referred to today as "Papa," and the current Papa John's logo has only been tweaked slightly from the one his dorm mate came up with almost 35 years ago. "You really can't make this stuff up," Schnatter says. "It's incredible."

Check out the longest pizza in the world:

13 PHOTOS
Italy longest pizza in the world
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'I owe someone $16,000 worth of free pizza': Papa John's CEO shares the fascinating story of how his $2.2 billion business got its name
Italy's judge of the 'Guinness World Record' Lorenzo Veltri (C) measures the length of the Pizza to be the longest in the world with 1600m long, on June 20, 2015 in Milan at the Expo Milano 2015. AFP PHOTO / OLIVIER MORIN (Photo credit should read OLIVIER MORIN/AFP/Getty Images)
Italy's judge of the 'Guinness World Record' Lorenzo Veltri (C) measures the length of the Pizza to be the longest in the world with 1600m long, on June 20, 2015 in Milan at the Expo Milano 2015. AFP PHOTO / OLIVIER MORIN (Photo credit should read OLIVIER MORIN/AFP/Getty Images)
People look at the longest pizza in the world with 1600m long, a new World Guinness Record, on June 20, 2015 in Milan at the Expo Milano 2015. AFP PHOTO / OLIVIER MORIN (Photo credit should read OLIVIER MORIN/AFP/Getty Images)
People look at the longest pizza in the world with 1600m long, a new World Guinness Record, on June 20, 2015 in Milan at the Expo Milano 2015. AFP PHOTO / OLIVIER MORIN (Photo credit should read OLIVIER MORIN/AFP/Getty Images)
People look at the longest pizza in the world with 1600m long, a new World Guinness Record, on June 20, 2015 in Milan at the Expo Milano 2015. AFP PHOTO / OLIVIER MORIN (Photo credit should read OLIVIER MORIN/AFP/Getty Images)
People look at the longest pizza in the world with 1600m long, a new World Guinness Record, on June 20, 2015 in Milan at the Expo Milano 2015. AFP PHOTO / OLIVIER MORIN (Photo credit should read OLIVIER MORIN/AFP/Getty Images)
Italy's judge of the 'Guinness World Record' Lorenzo Veltri (C) measures the length of the Pizza to be the longest in the world with 1600m long, on June 20, 2015 in Milan at the Expo Milano 2015. AFP PHOTO / OLIVIER MORIN (Photo credit should read OLIVIER MORIN/AFP/Getty Images)
Italy's judge of the 'Guinness World Record' Lorenzo Veltri (C) measures the length of the Pizza to be the longest in the world with 1600m long, on June 20, 2015 in Milan at the Expo Milano 2015. AFP PHOTO / OLIVIER MORIN (Photo credit should read OLIVIER MORIN/AFP/Getty Images)
Italy's judge of the 'Guinness World Record' Lorenzo Veltri (C) measures the length of the Pizza to be the longest in the world with 1600m long, on June 20, 2015 in Milan at the Expo Milano 2015. AFP PHOTO / OLIVIER MORIN (Photo credit should read OLIVIER MORIN/AFP/Getty Images)
Judge of the Guinness World Records Lorenzo Veltri checks the length of a pizza at the Expo 2015 world's fair in Rho, near Milan, Saturday, June 20, 2015. More than 60 of Italy's best pizza-makers worked through the night to create a 1.59545 kilometers, or nearly a mile long pizza at Milan's world fair. Their toil was rewarded with a proclamation by Guinness World Records judge Saturday that it was the world's longest pizza. Expo organizers said the record-setting pie, made with 1.5 tons of mozzarella and 2 tons of tomato sauce, weighed some 5 tons in all. (Daniele Mascolo/ANSA via AP)
Judge of the Guinness World Records Lorenzo Veltri checks the length of a pizza at the Expo 2015 world's fair in Rho, near Milan, Saturday, June 20, 2015. More than 60 of Italy's best pizza-makers worked through the night to create a 1.59545 kilometers, or nearly a mile long pizza at Milan's world fair. Their toil was rewarded with a proclamation by Guinness World Records judge Saturday that it was the world's longest pizza. Expo organizers said the record-setting pie, made with 1.5 tons of mozzarella and 2 tons of tomato sauce, weighed some 5 tons in all. (Daniele Mascolo/ANSA via AP)
MILAN, ITALY - JUNE 19: Pizza makers who try to make the world's longest pizza pose at the Expo 2015 on June 19, 2015 in Milan, Italy. (Photo by Pier Marco Tacca/Getty Images)
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